By Debbie Strickland

Its lead product now in Phase II trials, CytoMed Inc. completed the largest financing in its history, raising $17.1 million in a private placement of convertible preferred securities.

"This round will provide us with capital to see us through some of the development phase of the company," said Michael Fitzgerald, vice president and chief financial officer of Cambridge, Mass.-based CytoMed. "We will utilize the proceeds to further our two lead products through the development process."

Since CytoMed's founding in 1991, the inflammatory disease-focused company has raised a total of $42 million from institutional and venture investors.

Fitzgerald declined to say how far into the future CytoMed is now financed.

New investors were led by Schroder Ventures Life Sciences, of Boston; and New York-based Oracle Strategic Partners, including both BioAsia Investments, of Palo Alto, Calif., and WPG Farber, of New York.

Previous investors who came back for more included Stiefel Laboratories, of Coral Gables, Fla.; Atlas Venture, of Boston; Healthcare Ventures, of Princeton, N.J.; CIP Capital, of Philadelphia; and Gateway Partners, of St. Louis.

New York-based Punk Ziegel and Co. managed the transaction and acted as agent.

In the last three months, CytoMed has filed investigational new drug applications for CMI-392, now at the Phase II clinical stage for treating psoriasis and atopic dermatitis, and CMI-977, soon to enter Phase I studies as an oral treatment for chronic asthma.

The two lead compounds come from the company's library of small-molecule blockers of either the 5-lipoxygenase enzyme (5-LO), the platelet activating factor (PAF) receptor, or both. By stopping leukotriene production and PAF binding, the compounds put the brakes on symptoms of inflammatory diseases — bronchoconstriction, infiltration, swelling, congestion and pain.

CMI-392 is a small-molecule blocker of 5-LO and PAF activities. The drug is partnered with Stiefel Laboratories in Europe and Latin America. Phase I testing was conducted in Europe.

CytoMed's asthma drug, CMI-977, is a small-molecule oral leukotriene modulator that inhibits 5-LO.

Next up in CytoMed's pipeline is CMI-CAB-2, a recombinant protein now in preclinical evaluation for the treatment of complications associated with cardio-pulmonary bypass surgery, stroke and respiratory distress syndrome. The drug is a product of a collaboration with Chiron Corp., of Emeryville, Calif. *